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Williams-Sonoma Direct, Inc. v. Arhaus, LLC

United States District Court for the Western District of Tennessee, Western Division

January 30, 2015, Decided; January 30, 2015, Filed

No. 2:14-cv-02727-JPM-tmp

Opinion

 [*523]  ORDER DENYING IN PART DEFENDANT TIMOTHY STOVER'S MOTION TO DISMISS AND IN THE ALTERNATIVE FOR SUMMARY JUDGMENT (ECF NO. 111) AND ORDER DENYING IN PART DEFENDANT ARHAUS, LLC'S MOTION TO DISMISS OR IN THE ALTERNATIVE MOTION FOR SUMMARY JUDGMENT AS TO THE SECOND AMENDED COMPLAINT (ECF NO. 115)

Before the Court are two motions: first is Defendant Timothy Stover's Motion to Dismiss and in the Alternative Motion for Summary Judgment, filed November 5, 2014 (ECF No. 111); and second is Defendant Arhaus, LLC's Motion to Dismiss or in the Alternative Motion for Summary Judgment as to the Second Amended Complaint, filed November 10, 2014 (ECF No. 115) (together, "the Motions"). In this Order, the Court addresses the Defendants' motions to dismiss this action under Rule 12(b)(1) and (7) of the Federal Rules of Civil Procedure and reserves ruling as to Defendants' motions for summary judgment.

For the reasons stated below, the Motions are DENIED IN PART: the Court denies Defendants' motions under Rule 12(b)(1) and (7) of the Federal Rules of Civil Procedure.

I. BACKGROUND

A. Factual Background

The facts relevant to the determination of the Motions are as follows. Plaintiff Williams-Sonoma Direct, Inc. ("WSDI") initiated this action through the filing of a Complaint on September 18, 2014. (ECF No. 1.) [**3]  WSDI is a wholly owned subsidiary of Williams-Sonoma, Inc. (Prelim. Inj. Hr'g Tr. 42:16-42:19, Oct. 24, 2014, ECF No. 108 (testimony of Julie Whalen).) WSDI asserted four theories of liability: violation of the Tennessee Uniform Trade Secrets Act ("TUTSA"), breach of contract, breach of the duty of loyalty, and tortious interference with contract. (See Compl. ¶ 1.) Specifically, WSDI alleged that Arhaus, LLC d/b/a Arhaus Furniture ("Arhaus"), Jessica Daugherty,  [*524]  Timothy Stover, and Brad Voelpel violated the TUTSA, and that Arhaus and Stover were continuing to violate the TUTSA at the time this action was filed. (Id. ¶¶ 48-58.) WSDI's breach of contract claims were against Daugherty, Stover, and Voelpel. (Id. ¶¶ 59-67.) WSDI alleged that Voelpel breached his duty of loyalty. (Id. ¶¶ 68-71.) Last, WSDI brought tortious interference of contract claims against Arhaus and Stover. (Id. ¶¶ 72-78.)

WSDI filed a Second Amended Complaint on October 22, 2014. (ECF No. 83.) The Second Amended Complaint added Williams-Sonoma Retail Services, Inc. ("WSRSI") as a plaintiff, and added a breach of duty of loyalty claim against Stover (id. ¶ 74). WSRSI is a wholly owned subsidiary of Williams-Sonoma, [**4]  Inc. (Prelim. Inj. Hr'g Tr. 176:19-176:21, Oct. 24, 2014, ECF No. 108 (testimony of Steve Anderson).)

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304 F.R.D. 520 *; 2015 U.S. Dist. LEXIS 10746 **; 90 Fed. R. Serv. 3d (Callaghan) 1280

WILLIAMS-SONOMA DIRECT, INC. and WILLIAMS-SONOMA RETAIL SERVICES, INC., Plaintiffs, v. ARHAUS, LLC d/b/a ARHAUS FURNITURE and TIMOTHY STOVER, Defendants.

Subsequent History: Injunction granted at Williams-Sonoma Direct, Inc. v. Arhaus, LLC, 2015 U.S. Dist. LEXIS 79028 (W.D. Tenn., June 18, 2015)

CORE TERMS

secrets, confidential, subsidiaries, indispensable, impair, injunction, preclusive, impede, misappropriation, fiduciary, entities, joinder, loyalty, diversity, joined, tortious, vendors, tribes, third-party, persuasive, secrecy, induce

Civil Procedure, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Parties, Real Party in Interest, General Overview, Trade Secrets Law, Misappropriation Actions, Definitions of Misappropriation, Elements of Misappropriation, Improper Means, Existence & Ownership, Torts, Intentional Torts, Breach of Fiduciary Duty, Defenses, Labor & Employment Law, Employment Relationships, Employment Contracts, Contract Interpretation, Elements, Business Torts, Bad Faith Breach of Contract, Joinder of Parties, Compulsory Joinder, Necessary Parties, Collusive Joinder